Wall Street Journal and New York Times today
Over breakfast at Hi-Rise Bakery in Harvard Square, I read the Wall Street Journal for the first time in many months. Here’s what I learned…
International business is all about Asia these day, especially China. New product ideas come from Japan. New manufacturing plants are built in China. Europe is mentioned only as a troublesome complainer in World Trade Organization talks, trying to prevent American, Canadian, and Australian firms from labeling wine as “Chablis” or cheese as “Roquefort”.
The editorial page has some really thoughtful witers, notably a former NASA employee saying that the Shuttle is NASA’s Vietnam. It will never work because the reusable rocket idea is flawed, Homer Hickam notes, and the Shuttle is parked in the middle of a bunch of explosive rocketry rather than safely perched on top of all the nasty stuff. “Simply put, had that spaceplane been on top of the stack, the destruction of Challenger and Columbia wouldn’t have occurred.” He advocates replacing the Shuttle with expendable launchers and a new spaceplane.
The rest of the editorial page is devoted to right-wing gloating. There is an article on how high-tax Democrat-controlled states such as California, Massachusetts, and New York lost population between 1995 and 2000 to Republican-controlled low-tax states such as Arizona, Nevada, Florida, the Carolinas, and Texas. One reason cited for this migration is the high cost of housing in places such as LA or NYC. But the author doesn’t explain why, if LA and NYC suck so badly, people are willing to pay $1 million for a tiny residence there…
A reader writes from Rhode Island to attack Howard Dean, a Democratic Party presidential candidate who proposes increased taxes and more ridistribution of income. The reader, C. Dale Reis, notes that his parents could afford to support a family on a single income because taxes were low back around 1950. Today, because taxes are so much higher, it takes two incomes to generate a middle-class lifestyle.
Our political system has turned the house and car every few years that my laborer father could afford into transfer payments from his bank account to the social system set up to buy votes for the politicians. And what the middle class has gotten in return is the breakup of the traditional family and the resulting decline of our moral values.
Mr. Dean professes to care about “the children.” But it has been the increase in taxes over the past generation that has spawned latch-key suburban children, urban gangs, and overly aggressive toddlers coming out of day care.
One of the main editorials is about the latest statistics on SAT scores. It seems that the black-white gap has grown quite a bit over the past 10 years. A typical black student will score 206 points lower than a typical white student on the SATs. Public schools are blamed, of course, with the suggestion that vouchers and school choice are the answer. A study is cited where the conclusion is that “students who have roughly equal skills and knowledge will have roughly equal earnings”. At first glance this seems reasonable. You can’t cheat the marketplace forever, no matter how many layers of racial preferences are imposed by society. On the other hand, look at all the business executives who earn fat salaries while remaining ignorant of all things related to making products, accounting, and other skills that were traditionally associated with managing a business. If Carly Fiorina can rise to the top of HP, why can’t a black man get paid a fat salary despite a low level of knowledge and skill? [One simple comprehensive explanation that the Journal does not consider is whether the racial quotas in colleges and graduate schools has something to do with it. Why bother to study for standardized tests if you know that the color of your skin will guarantee you a spot in the college of your choice?]
Shifting over to the New York Times there is a fun article on Richard A. Grasso, the head of the New York Stock Exchange. The Exchange itself doesn’t make that much in profit, only $28 million last year. Grasso, however, decided to help himself to $12 million in annual salary, nearly half of the entire enterprise’s profits, and $140 million extra in “deferred savings and retirement benefits”. The extra $140 mil, equivalent to about 5 years of profits for the NYSE, is held in a special account on which he is guaranteed at least an 8% annual return, risk-free. That’s 10 times the interest rate that investors in money-market accounts are getting.
That’s all the news for today…
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